If I listen to the market commentators on TV, they seem to tell me that things are going well…
However, when I look at the price of oil hitting $112 a barrel and gasoline prices heading back to $4 a gallon are we back to “good times”…when I look at unemployment level I see that the U.S. is at 8.8% still. Are those good times? I see that Obama is going to talk about raising taxes in a speech tomorrow. Are those good times? I see that if we don’t raise our debt ceiling before May 16th, then we’ll have utter chaos.
Now does all of that equal “good times”? I can’t see it.
When I drive through neighborhoods, I still see too many foreclosure signs in the yards. I still see over 44 million Americans on government assistance programs, etc.
That’s why I believe the Elliott Wave counts are correct. They count the recent rally as a correction upward in a larger bear market.That’s very different from the recent upswing being a new “bull market”. Big difference.
I also think the correction upward in stocks could be nearing its end now or may have even ended already. If the Dow, S&P 500 and Nasdaq can’t push through their former highs, then we’re probably looking at a double top on those charts. If you consider things like the huge MACD divergences on those charts, then it’s even more likely that a top could be forming.
When you look at all of this and then you consider that most of the G-7 nations can’t even grow at 1% right now on a year-over-year basis…you know that we’re on the bring of another recession. In fact, New Zealand, the U.K. and Japan all have negative GDP readings right now.
So if something doesn’t change drastically and quickly, then those tough times could be back.
If they do…this time we’d have tough times with higher debt levels than before. We’d have tough times but with weaker dollars due to all of the “money printing” from the Fed. We’d have tough times but still high inflation….again due to the money printing program of the Federal Reserve.
Okay, but here is the good part…even when there is a gloomy picture, there are still plenty of opportunities to make money trading currency pairs. You can trade successfully through both bull and bear markets in stocks. You can have success through high unemployment or low unemployment…high oil prices or low, etc. That’s the good news…and that’s why I love trading in the forex market. It gives me more control over my future in the midst of many things going on around me which are far out of my control.
Editor, Currency Cross Trader